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State audit of New Bloomfield begins

State audit of New Bloomfield begins

January 31st, 2019 by Helen Wilbers in Local News

<p>Helen Wilbers/For the News Tribune</p><p>State Auditor Nicole Galloway, left, talks to Jennifer Graves and Cheri Wilson, of New Bloomfield, in April. Several New Bloomfield residents presented a petition with 102 signatures asking Galloway&#8217;s office to audit the town last year.</p>

NEW BLOOMFIELD, Mo. — State Auditor Nicole Galloway will be taking a closer look at New Bloomfield's finances.

Galloway's office on Wednesday announced the beginning of a resident-requested audit into the city.

"My office will conduct an independent review of the financial practices of New Bloomfield city government to ensure operations are efficient and effective," Galloway said. "I appreciate the engagement of citizens in this process and welcome those with specific concerns to reach out through my Whistleblower Hotline."

Though New Bloomfield is subject to an annual audit from an outside firm, this is the first state auditor-led examination of the city since 2004. The audit was triggered by a resident petition circulated by a group now calling itself the "Committed Citizens of New Bloomfield."

"We are glad it's finally happening," said Cheri Wilson, a leading group member and mayoral candidate.

She and others hand-delivered the petition to Galloway in April after it met the 100-signature threshold.

An audit manager met with New Bloomfield city officials Tuesday evening to initiate the process.

"They gave us a list of documentation last night at the meeting, and it'll take us some time to assemble all of them," Mayor Terry Shaw said Wednesday.

Shaw said city leadership views the audit as an unnecessary and redundant expense.

"We don't like to have to pay for it because we pay for an independent audit every year," he said.

Galloway has noted previously that it's hard to estimate how long an audit will take — it varies depending on the audit's scope and the availability of records. The entity being audited must pay for the audit's cost, which likely will be $20,000-$40,000, Shaw said.

New Bloomfield residents first raised concerns about their town's finances following the dissolution of the town's two-person police department in February 2018. Then-Mayor Greg Rehagen has stated budget issues led to the cuts. Police salaries — $15,350 in the 2017 budget, $14,580 in the 2018 budget — are paid from the general fund, he said.

Some New Bloomfield residents don't think that's a sufficient explanation, pointing to salary increases for other city employees, including the superintendent salary (from $70,967 to $75,967) and the clerk (from $30,246 to $36,051).

"We hope they find out if Alderwoman (Rosemary) Augustine voted on pay increases for her brother, the City Superintendent (Mike Rieken)," Wilson said.

The 2004 state audit of New Bloomfield noted the city's declining general fund and instructed officials to decrease expenditures. It also noted funds intended for particular uses were being applied to other projects — for example, $6,909 in state motor vehicle revenues went toward paying for a handicap parking space and ramp at City Hall. Other problems, ranging from a lack of written contracts and bidding processes for certain services to undocumented closed sessions, abounded as well.

While city leadership has changed significantly in the 15 years since 2004, some of those findings echo concerns voiced by those who petitioned for this new audit: high expenditures and skipped bidding processes for contracts.

"It will be nice to find out if our town's funds are being spent wisely by state standards," Wilson said. "We hope that our city leaders have not misappropriated funds and are doing things by the book."

Shaw said city leadership isn't concerned.

"We've been expecting the audit, and of course we're all right with it," he said. "We're not afraid of it, and we're not doing anything wrong."

Individuals with information related to the audit are encouraged to contact the State Auditor's Whistleblower Hotline by calling 800-347-8597, emailing moaudit@auditor.mo.gov or using the submission form at auditor.mo.gov/hotline.

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